Amplats Mines Disrupted as 5600 Workers in South Africa Strike – Bloomberg


    Anglo American Platinum Ltd. (AMS), the
    world’s biggest producer of the metal, said 11 percent of its
    workers went on strike less than a week after a state-sponsored
    peace accord failed to win unanimous agreement from unions.

    About 5,600 striking workers at the Thembelani and
    Khuseleka 1 mines in South Africa are demanding that suspended
    officials from the Association of Mineworkers and Construction
    Union are reinstated, the Johannesburg-based company known as
    Amplats said in a statement today. The stoppage is unauthorized,
    the Anglo American Plc (AAL) unit said.

    The AMCU was the only union that last week refused to sign
    the agreement aimed at bringing stability to mines as pay
    negotiations begin. Falling precious metal prices are
    constraining companies’ ability to meet union wage demands
    higher than a year ago, when strikes and inter-union conflict
    spilled over into violence that led to at least 44 deaths.

    “Strike action has been surprisingly subdued in South
    Africa, and we wait to see whether this triggers action at other
    sites as wage negotiations advance against a background of
    inter-union tensions,” Investec Plc (INVP)’s Global Natural Resources
    Research Team said in a note today.

    Aside from seeking a reversal of the ban on the union
    officials for joining a sit-in protest, the workers also want
    job cuts scrapped and a guarantee that a rival union be banished
    from Amplats mines, the company said. Production was disrupted
    at Thembelani last night and at both mines during the morning
    and afternoon shifts, it said.

    No Violence

    There have been no reports of violence since the strike
    started, Sabata Mokgwabone, a spokesman for the South African
    Police Service, said in a phone interview.

    Jeff Mphahlele, general secretary for the AMCU, said some
    of the union’s members didn’t go to work at Thembelani,
    declining to give further details.

    Rivalry between the National Union of Mineworkers and the
    AMCU, which has been winning employees from NUM, has escalated
    tensions at mines across the country. Last month miners at
    Thembelani, about 120 kilometers (75 miles) northwest of
    Johannesburg, temporarily trapped 2,400 of their colleagues
    underground as part of a union dispute.

    Today’s striking workers are demanding Amplats give a
    guarantee that NUM won’t be allowed to return to the company’s
    operations, the platinum producer said.

    Job Cuts

    Inter-union disputes have led to three workers’ deaths
    since May in the Rustenburg area. Last year’s violence included
    the deaths of 34 protesters killed by police in a single day
    near Lonmin Plc (LMI)’s Marikana platinum mine.

    Amplats is planning to cut 6,000 jobs as part of an effort
    to return to profit by idling three shafts and reducing annual
    output by 350,000 ounces of metal. Talks with unions about the
    proposal are due to end on Aug. 10.

    Lonmin, the world’s third-largest platinum producer, said
    today that the NUM has brought a court application relating to
    its membership numbers and those of AMCU. The platinum producer
    said it couldn’t comment further before the hearing. NUM is
    disputing the authenticity of AMCU’s membership numbers,
    spokesman Lesiba Seshoka said last week.

    “The company’s wider position remains that it wishes the
    issue of union status at its operations to be resolved
    peacefully, and as quickly as possible, for the benefit of all
    stakeholders,” Lonmin said in the statement.

    Peace Appeal

    Deputy President Kgalema Motlanthe was appointed by
    President Jacob Zuma to broker a solution to mine labor unrest,
    leading to last week’s peace accord. The agreement was signed by
    the Chamber of Mines, which represents producers, government
    departments and labor unions apart from the AMCU, which is led
    by former NUM official Joseph Mathunjwa.

    “Anglo American Platinum would like to urge all employees
    and their union representatives to live by the spirit of the
    deputy president’s peace and stability framework and to promote
    the peaceful co-existence of all the recognized unions at our
    operations,” Amplats said in its statement.

    The rand gained 0.5 percent to 10.1554 per dollar by 4 p.m.
    in Johannesburg, after slumping as much as 0.9 percent earlier
    to the weakest level since June 24. Amplats rose 2.5 percent to
    286.7 rand by 4:15 p.m. in the city.

    While platinum has dropped 13 percent this year, gold is 27
    percent lower. A weaker gold price is hampering the ability of
    producers of the metal to meet wage demands, according to the
    Chamber of Mines, which represents South African bullion miners.

    The mines chamber today hosted a pre-wage negotiation
    meeting with unions aimed at winning agreement on how talks will
    be conducted.

    Entry-level underground gold miners receive a minimum wage
    of 5,000 rand ($487) a month. AMCU is seeking to more double
    this figure to 12,500 rand while NUM wants a 60 percent

    South African workers may strike with their jobs protected
    as long as an independent mediator agrees to the stoppage and
    talks between unions and companies have failed.

    To contact the reporter on this story:
    Kevin Crowley in Johannesburg at

    To contact the editor responsible for this story:
    John Viljoen at

    Amplats Mines Disrupted as 5600 Workers in South Africa Strike – Bloomberg

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